Topics in Mathematics of Finance -- Ari Stern, February 19, 2002

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This talk will cover some of the basic, fundamental concepts and techniques 
used in mathematical finance. The speaker will give an introduction to the 
basic theoretical toolkit (including the concepts of arbitrage, risk-neutral 
probability, and Monte Carlo simulation), and show how to use this framework 
to price some simple derivative securities (forwards and options) using 
discrete time models. Time permitting, additional topics will be covered, 
such as continuous price models, Brownian motion, the Black-Scholes model 
for pricing options, implied volatility and volatility smiles, the problems 
with the normal distribution, and the great "efficient market theory" debate.